Retirement Planning

For most of us, Retirement is synonymous with receiving the pension; however, it may not be necessary for everyone who retires or wish to retire at any stage in life would enjoy getting a pension. One could also have a sizeable corpus being received at the time of retirement and that could generate returns on investment. One important aspect to such an option is that you work for good 30+ years, uninterruptedly, to create a corpus or get eligible for pension only if your organisation has such schemes. It’s a systematic approach of investment and continuity of job that enables you to qualify for pension/returns as the situation one is in. The uncertainties in the career and not-so-friendly schemes in not only the private sector even with some of the PSUs who have withdrawn pensions make it inevitable for all of us to work towards creating corpus sooner than later. Another important aspect is to understand that the pension or annuity from various retirement schemes is taxable and it works out to be unviable post taxes as it doesn’t beat inflation. The pension plans in the market are also not attractive as the taxable annuity is subject to change after every 5 years depending on the interest rate scenario. Therefore, an investor must plan his/her investment either in tax-efficient instruments or in retirement plans which give tax-free pension lifelong.